Bloomberg News

China Investment in U.S. Is No Trojan Horse, Minister Chen Says

November 10, 2012

China’s Commerce Minister rejected U.S. concerns that Chinese investments in the U.S. were a potential Trojan horse and urged the administration of President Barack Obama to keep politics and economic issues apart.

“This notion smacks a little of Cold War mentality,” Chen Deming told reporters at a briefing in Beijing during the Communist Party’s 18th National Congress. “If you regard me as a potential Trojan horse, how will I view you? It’s not in America’s interests to think this way.”

The U.S. House of Representatives Intelligence Committee last month advised American businesses to avoid buying from China’s two largest phone-equipment makers, saying their ties to the Chinese government meant they couldn’t be trusted. The dominance of state-owned companies in the Asian nation’s foreign direct investment could harm U.S. economic and national security interests, a congressional advisory panel on China relations warned in a report this month.

Huawei Technologies Co. and ZTE Corp. provide opportunities for Chinese intelligence services to tamper with U.S. telecommunications networks for spying, according to the committee report released Oct. 8. The two companies denied links to espionage at a hearing in September, telling lawmakers they weren’t controlled by the Chinese government.

“The U.S. raised the security issue of Huawei and ZTE to the level where they are asking whether the companies have Communist Party cells and what their relations are with the party,” Chen said today. “Personally I think this has gone too far.”

If China’s parliament and government started asking the same questions to U.S. companies in China and what relations they have with the Democratic and Republican parties “there would be chaos,” Chen said.

--Zheng Lifei. Editors: Nerys Avery, Jim McDonald

To contact Bloomberg News staff for this story: Zheng Lifei in Beijing at lzheng32@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net


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